On November 14, Tesla China's official Weibo announced that the price of the Model 3 / Y rear-wheel drive version will be increased from now on.。

Specifically, the price of the Model 3 rear-wheel drive version has increased by 1,500 yuan (RMB, the same below), and it is now quoted at 26.140,000 yuan。Model Y rear-wheel drive version price increase of 2,500 yuan, now quoted at 26.640,000 yuan。

Tesla's price increase in China is the third time in nearly a month。

On October 27, Tesla announced an increase in the price of the Model Y high-performance version by 1.40,000 yuan, the lowest price after the price increase 36.390,000 yuan。

On November 9, Tesla announced another price increase.。Among them, the Model 3 long-life version of the price increase of 1,500 yuan, the lowest price after the price increase 29.740,000 yuan; at the same time, the Model Y long-life version of the price increase of 2,500 yuan, the lowest price after the price increase of 30.240,000 yuan。

After three rounds of price increases, all of Tesla's Model 3 / Y electric vehicles have completed price increases。

In response to the recent price increase, Tesla China officials said that Tesla will regularly adjust the price of locally produced vehicles according to production costs.。Although Tesla classified the price increase as a "regular adjustment," this operation is still a bit of a "face" Musk's previously proposed "price-for-volume" strategy.。

Tesla is in a dilemma after the "price war"

From these price increases can be speculated that Tesla is facing the "dilemma" - to continue to cut prices in exchange for sales, or to increase prices to save its gross profit.？

If Tesla is to continue to cut prices, the company will have to face the reality that the effect of its "price-for-volume" strategy is diminishing marginally.。

The most direct manifestation of this marginal decline is in sales.。Tesla delivered a total of 435,059 vehicles in the third quarter, down 6 percent from the second quarter, the first quarter-on-quarter decline in a year, according to the Federation of Passengers.。The number is also well below Wall Street expectations of about 456,000 vehicles.。Market share also shrank from 13% in the second quarter to 10% in the third quarter.。

The reason behind this "price reduction failure" phenomenon is the "price war."。Tesla's sudden price cut at the beginning of this year did attract a lot of consumers.。But when a number of car companies followed suit and cut prices and triggered multiple rounds of "price wars," the situation changed.。Consumers have found that the price difference between the major car competitors has not changed much after car companies have cut prices.。In this case, the advantage of Tesla's price reduction is greatly weakened, and consumers will naturally not "decisively rush" to Tesla.。

And most importantly, price cuts are eating into Tesla's profit margins。Multiple price cuts this year have allowed Tesla's gross margin to fall directly below the 20% mark。Tesla's gross margin was 17 in the third quarter..9%, automotive gross margin is directly down to 16.3%。In contrast, Tesla's main rival BYD's gross margin reached 19 in the third quarter..79%, has exceeded Tesla for three consecutive quarters。

This is also the main reason for widespread speculation that Tesla chose to raise prices.。And when Tesla raises prices to preserve margins, the company is in a new predicament - what about sales?？

In his third-quarter earnings call, Musk reiterated Tesla's goal of producing and delivering 1.8 million electric vehicles by 2023.。But in the first three quarters of this year, Tesla delivered only about 1.3 million vehicles worldwide.。This means that Tesla will need to deliver about 500,000 vehicles in the fourth quarter to meet its annual delivery target.。But judging from its sales in the third quarter, the quarterly sales of 500,000 vehicles are a difficult task for Tesla.。

Moreover, China, a major market for Tesla, was the fourth quarter of the traditional car sales season, and Tesla's choice to raise prices here and now is not conducive to achieving its sales target of 500,000 vehicles.。At the same time, this move is likely to push consumers further and further, after all, there are many electric car brands in the Chinese market, and it is not ruled out that consumers who are on the sidelines of Tesla will eventually switch to other brands.。